October 20, 2010

EDWARD JAY EPSTEIN'S WEB LOG

Saturday, October 16, 2010

Role Reversal: Why TV Has Replaced Movies as Elite Entertainment

Once upon a time, over a generation ago, The television set was commonly
called the “boob tube” and looked down on by elites as a purveyors of
mind-numbing entertainment. Movie theaters, on the other hand, were
considered a venue for, if not art, more sophisticated dramas and
comedies. Not any more. The multiplexes are now primarily a venue for
comic-book inspired action and fantasy movies, whereas television,
especially the pay and cable channels, is increasingly becoming a venue
for character-driven adult programs, such as The Wire, Mad Men, and
Boardwalk Empire. This role reversal, rather than a momentary fluke,
proceeds directly from the new economic realities of the entertainment
business.

Consider what happened to Pay-TV. Back in the 1970s, HBO provided
something home viewers could not get elsewhere: movies uninterrupted by
commercials. It was, as a HBO executive put it, “the only game in town,”
so its subscribers paid a monthly fee, no matter how little or often
they watch it, to their local cable provider who in turn forked over a
share to HBO. As the cable systems grew, so did HBO. By 2010, it had
(including its Cinemax unit) over 40 million subscribers, and just the
monthly fees produced cash flow of over $1.5 billion a year. Getting new
movies was no problem. HBO simply licensed them from a few major
studios for an exclusive period (which began a few months after they
were released on video and DVD) in so-called “output deals.” To continue
to harvest this immense bounty, HBO had merely to stop subscribers from
ending their service.
But that feat became far more difficult as alternatives became readily
available, including video stores, Netflix, and the Internet. Why should
anyone pay a monthly fee to see movies on pay TV when it could get it
else where cheaper and faster? The answer HBO executives found was to
create its own original programming designed to appeal to the head of
the house. Here it had several advantages over Hollywood. It did not
need to produce a huge audience since it carries no advertising and gets
paid the same fee whether or not subscribers tune in. Nor did it have
to restrict edgier content to get films approved by a ratings board
(there is no censorship of Pay-TV). And it did not have to structure the
movie to maximize foreign sales since, unlike Hollywood, its earnings
come mainly from America. As a result, HBO and the two other
pay-channels, Showtime and Starz, were able to create sophisticated
character-driven series such as The Wire, Sex and the City, The L Word,
and The Sopranos. As this only succeeded in retaining subscribers and
also achieved critical acclaim, advertising-supported cable and
over-the-air network had little choice but to follow suit to avoid
losing market share. The result of this competitive race to the top is
the elevation of television.

Meanwhile, Hollywood went in the other direction. In the era of the
studio system, the Hollywood studios opened their movies in a few dozen
select first-run theaters, most of which they owned, and then, with the
help of critical acclaim and favorable word-of-mouth, gradually moved
them into local theaters. To accomplish this, they did not need huge
advertising or print budgets. Nowadays, confronting a very different
economic landscape, they open most of their major movies on 3,500 to
5,000 screens which are owned not by them but by a handful of multiplex
chains. Multiplexes are in the “people-moving business,” as on multiplex
owner put it, which means moving herds of movie-goers past the
concession stands In return for providing their screens, these chains
expect the studios to provide them with two things: first,
lavishly-produced movies; second, and even more important, a national
marketing campaign for each movie that will fill their multiplexes with
consumers on opening weekend. Since such campaigns cost about $30
millions of dollars per movie, studios require that their marketing arm
sign off on each project before it is greenlit for production. For the
marketing executives, the deal-breaker is not the intrinsic merits of
the film itself but the absence of the elements needed to build a
marketing campaign both in America and abroad (where up to 65 percent of
the revenue comes from.) Such campaigns typically require buying time
on TV programs around which clusters an audience predisposed to going to
the movies every weekend and then hitting it with 7 ads in the week
leading up to its opening weekend. The target audience that fits this
bill is tweens and teens, which are also the groups with the greatest
propensity to consume popcorn and soda.

The least risky way to find movies that lend themselves to campaigns
around which a global marketing can be built is to copy the movies for
which marketing campaigns have succeeded in driving the requisite
audience into the multiplexes; hence, the profusion of comic book-based
movies and their sequels. In addition, studios must take into account
that their movies must play in overseas markets, such as Korea, Japan,
China, Russia, and Brazil, where visual action takes precedence over
sophisticated dialogue. So the dumbing-down of movies is no accident.